In order to be a contract to be valid, three essential elements must be present.Otherwise, it won’t be enforceable by law.
1) There must be an Agreement –
In other words, it is called consensus ad idem. This is completely based on the mutuality between the parties.
2) There must be Consideration-
That means both the parties are bound to exchange something to each other (opposite of gratuitous promise-A promise that is not supported by consideration) – or the quid pro quo or proof that a bargain is in existence.
3) There must be an intention to create a legal relation-
It must be intended by both the parties to be legally bound by the terms and condition of their agreement.(N.B. in case of a simple contract made either in writing or orally or by conduct must be supported by a valid consideration to be valid, because they are not made by deed.(Deed – where a form is expressed to be made by deed, in a formally written form and singed in, which consideration is not necessary.) These are the rules of formation of a contract.
1) There must be an Agreement –
In other words, it is called consensus ad idem. This is completely based on the mutuality between the parties.
2) There must be Consideration-
That means both the parties are bound to exchange something to each other (opposite of gratuitous promise-A promise that is not supported by consideration) – or the quid pro quo or proof that a bargain is in existence.
3) There must be an intention to create a legal relation-
It must be intended by both the parties to be legally bound by the terms and condition of their agreement.(N.B. in case of a simple contract made either in writing or orally or by conduct must be supported by a valid consideration to be valid, because they are not made by deed.(Deed – where a form is expressed to be made by deed, in a formally written form and singed in, which consideration is not necessary.) These are the rules of formation of a contract.
